Waste Watch

The Taxpayers’ Union is encouraging political and government insiders to ‘dob in’ examples of government waste and extravagance. Experience of taxpayer groups overseas suggests that many of the best tips come from within government, particularly bureaucrats frustrated with waste and inefficiency. We put the government – politicians, officials and taxpayer-funded groups on notice that taxpayer money should treated with care. The Taxpayers’ Union guarantees the anonymity of all members of the public who submit information via the tip line.

The Taxpayers’ Union revealed a massive cost overrun of a mismanaged IT project jointly commissioned by DoC and Land Information New Zealand (LINZ). Two independent reports on the project are damning of DoC. They blame mismanagement and ineffective governance for the project’s failure. It appears that LINZ has walked away from the project and has left DoC to pick up the pieces. A selection of the media coverage is below.

Yet another Government IT project has gone off the rails with a new Department of Conservation land management system costing taxpayers millions in budget overruns while still failing to deliver as promised.

And as in the case of the Novopay debacle, officials have blamed an Australian IT company.

The National Property and Land Information System (NaPALIS) initiated two years ago was joint programme intended to replace the Department of Conservation's (DoC) and Land Information NZ's (Linz) existing systems, with Tasmanian company ICS winning the contract.

However documents obtained under the Official Information Act by activist group the Taxypayers Union reveal the $5.6 million project was completed several months late in September last year, required an extra $588,967 to complete and even then failed to function as required by DoC.

DoC has now allocated about $2 million of additional funding to make the programme fully operational.

Personality clashes between government departments could be to blame for a failing and over budget information system.

Documents released to the Taxpayers' Union show efforts for the Department of Conservation and Land Information New Zealand to work together to create a database of the country's land have been dodgy at best.

Union spokesperson Jordan Williams says the project is now $2 million over budget, and still not fully operational.

He says two independent reports blame ineffective governance, and even officials from the the two departments not getting along.

System now top priority

An expensive and overdue information system is now the top priority for Department of Conservation bosses to see fixed.

The National Property and Land Information System was due to be finished early last year, but still isn't fully operational, and needs an injection of $2 million for bug fixes.

Director-General Lou Sanson says he doesn't like waste, so he's determined to get it sorted.

He says taxpayers can be assured he'll wring maximum value out of the system to make up for the delays.

The tip line works

Just after publicly launching in October, the Taxpayers' Union received an anonymous tip off that there was a massive cost overrun of a mismanaged IT project jointly commissioned by DoC and Land Information New Zealand (LINZ). The National Property and Land Information System (“NaPALIS”) had allegedly been a failure, with DoC still picking up the pieces 18 months after the project was scheduled to be complete.

This morning a DoC official hand delivered the response to the requests for information by the Taxpayers' Union. We understand that the Director General will be making a public statement this afternoon.

The material includes two independent reports that are damning of DoC. They blame mismanagement and ineffective governance for the project’s failure. It appears that LINZ has walked away from the project and has left DoC to pick up the pieces.

We're still reviewing the material, but to summaries one of the independent reviews of the project (conducted by Deloitte), it found:

ineffective governance;

inadequate business ownership;

lack of shared vision and shared outcome by DoC and LINZ for NaPALIS;

the NaPALIS Programme’s failure to deliver benefits to DoC;

lack of effective and inclusive requirements and development phase;

ineffective work on cultural alignment and change management between DoC and LINZ;

personality clashes between the DoC and LINZ;

an “us and them” approach -the report says:

“The Programme Manager was seen to be working only for LINZ most of the time, leaving DoC to flounder”;

lack of focus by the Programme Manager on achieving a join outcome;

lack of accountability by the Programme Manager;

ineffective vendor management; and

lack of independent quality assurance.

Update:

The NZ Herald have now picked up the story. Our media release is copied below.

MEDIA RELEASE

TAXPAYERS’ UNION UNCOVER MASSIVE I.T. SCREW UP WITHIN DOC

18 DECEMBER 2013FOR IMMEDIATE RELEASE

The Taxpayers’ Union has uncovered an IT screw up within the Department of Conservation as a result of a tip-off to taxpayers.org.nz relating to DoC’s National Property and Land Information System (“NaPALIS”).

Two independent reports by accountancy firm Deloitte are damning of DoC. They blame mismanagement and ineffective governance for the project’s failure. NaPALIS was joint project between DoC and Land Information New Zealand. Despite DoC allocating over $2 million in additional funding, the system is still not fully operational. The IT project has cost taxpayers over $6 million and LINZ appear to be leaving it to DoC to fix up the mess.

“This is DoC’s very own Novopay,” says Jordan Williams, Executive Director of theTaxpayers’ Union. “The two independent reviews show how mismanaged the project was from day one. It appears that LINZ have now walked away from the project and left DoC with a system which isn’t up to the replacing the old one.”

“The warning bells were ringing from the start. There needs to be accountability for the taxpayers’ money that has been wasted on a computer system that doesn’t work.”

“DoC’s internal ‘closure report’ skims over the two damning Deloitte reports. It suggests that no lessons have been learned.”

“While the Taxpayers’ Union is troubled by what has been uncovered, at least the public can now see how badly the project was mismanaged by DoC. The Taxpayers’ Unionbegan researching the issue after an anonymous tip off at taxpayers.org.nz.”

The information and reports by Deloitte released by DoC to the Taxpayers' Union are available at www.taxpayers.org.nz.

Q & A

What is the NaPALIS Programme?The NaPALIS Programme and resulting new Land Management Information System was to bring together 9 business groups across LINZ and DoC to create a single, shared ‘source of the truth’ for over 40% of New Zealand’s Land totaling over $6 billion in value.

When was NaPALIS expected to go live?NAPALIS was scheduled to go live in February 2012. In March 2012, this was revised to May 2012. It went ‘partially operational’ in September 2012. For DoC, the system is still not operational.

How much did the programme cost and is it finished?The programme is now 18 months overdue and it still doesn’t work. To fix the bugs, DoC and LINZ initially increased the budget by $588,967 to $6,194,134. It appears that LINZ has now walked away from the project leaving DoC to allocate another $2 million to complete it.

What’s the latest $2 million for?Despite the extra spending by DoC and LINZ, NaPALIS is still only partially operational. The new $2 million allocated is to address (among other things):

work to resolve the majority of system defects necessary to make NaPALIS operational;

including the backlog of necessary changes that were not part of the initial data migration;

completing a technical review and considering design solutions;

resolving essential architecture issues; and

process development and system changes relating to Treaty of Waitangi matters.

What does the first expert review say?There were warnings back in March 2013 when Deloitte published it first report. It shows that:

the role and authority of the NaPALIS was being “undermined”;

there was no external member of the Steering Committee;

there were issues of scope; and

that delays were persistent.

The report also says:

“There was a lack of clarity around business ownership with DoC and LINZ”

“The Programme did not have a consistent approach to Independent Quality Assurance (‘IQA’) from the outset.”

What does the subsequent independent report say? The February 2013 Deloitte report is even more critical of DoC. The specific issues it identifies are:

ineffective governance;

inadequate business ownership;

lack of shared vision and shared outcome by DoC and LINZ for NaPALIS;

the NaPALIS Programme’s failure to deliver benefits to DoC;

lack of effective and inclusive requirements and development phase;

ineffective work on cultural alignment and change management between DoC and LINZ;

personality clashes between the DoC and LINZ;

an “us and them” approach - the report says:

“The Programme Manager was seen to be working only for LINZ most of the time, leaving DoC to flounder”;

lack of focus by the Programme Manager on achieving a joint outcome;

lack of accountability by the Programme Manager;

ineffective vendor management; and

lack of independent quality assurance.

The report’s conclusions include:

NaPALIS went live in September 2012 after a number of delays. It was implemented over budget and several months after it was expected to be implemented. We believe that there was potential to deliver a join successful outcome. However, ineffective governance and management of the NaPALIS Programme has meant that a successful outcome has not been delivered forboth organisations. LINZ are using the new tools and processes that NaPALIS provides, whilst DoC do not feel able to use these new tools and processes effectively. DoC are indicating that another Programme of work is required costing several hundred thousand dollars to get NaPALIS to a point where it will meet their business needs.”

“We do not believe that the Programme was set up well from the outset and that the Governance and Programme/Project Management controls that were put in place fell short of good practice.

Can the public access the material?We’ve uploaded the information released by DoC under the Official Information Act is copied below.

While we can all applaud our world-class film industry and the jobs the deal will create, why is the film industry so special? Many industries are still suffering from a high dollar and increased international competition. As the Government acknowledges (at least for film producers) tax matters when it comes to business choosing what country to invest - we compete against the world. Why should less high profile or ‘cool’ industries shoulder the burden while the film industry is sheltered – would we better off if the Government worked harder to lower taxes for all?

What's the difference between a 'cafe-style space' and a cafe?

Not a lot, but according to the government-owned monopoly Transpower, a $1.2million 'cafe-style space' is value for money unlike asking staff to visit the dozen cafes within a few hundred metres of its Wellington office building.

In 2012, the taxpayer owned company spent $1.2million refurbishing its reception and building "The Wire" a place where, according to Transpower CEO Patrick Strange, "we can engage and collaborate with each other, and with our guests."

Back in September, a Taxpayer's Union volunteer asked about the new cafe Transpower had built at 96 The Terrace, Wellington. It seems that calling it a "cafe" caused some offence. Transpower said (even bolding the text to emphasis the point):

The space on the ground level of Transpower House is not a café – it is a space for Transpower staff to meet internally and with our key stakeholders.

We were told that the combined cost of the cafe space and adjacent reception area was $1.2million.

Unfortunately, Transpower would not initially tell us how long its lease for the building had remaining. After some haggling, we learned that the current lease expires in 2014.

The Taxpayers’ Union can reveal that the New Zealand Transport Authority's 'Drive Social' campaign cost taxpayers $1,492,395 on advertising, $985,019 on communications and advertising consultancy fees and $301,872 in other related costs. This website alone cost $186,142.

The 'Drive Social' campaign was organised by NZTA to educate road-users that they “share the road with other drivers” and instructs them to “be considerate” (we're not making this up!).

We think that the funds for these sort of self-evident campaigns would be better spent on improving roads or preventing drink driving. The Taxpayers’ Union asked the NZTA to provide cost-benefit analysis of the campaign. Instead, it could only provide us the costs to the taxpayer and ‘media monitoring’ reports.

We can all support advertising efforts to reduce the road toll, but here is an agency spending nearly three million dollars to tell drivers that there are other drivers on the road. It’s bureaucrats spending our money to treat us like children.

Complete with a condescending tone and nursery rhyme-like music the ‘Drive Social’ website would insult the intelligence of most drivers. Judge for yourself at www.drivesocial.co.nz.

Since July 2011, the Marlborough District Council has paid $410,550 for website design maintenance and development costs. In comparison Dunedin City Council spent only $35,520 over the same time period.

“The only council that spent more on web design than Marlborough was Auckland Council” says Jordan Williams, Executive Director of the Taxpayers’ Union.

“Even if we assume that half of Marlborough’s residents have actually visited the site, it would probably have been cheaper for the Council to pay for a taxi for them to visit the office. It is potentially a huge waste of ratepayer money.”

Wellington City, which redeveloped its award winning website earlier in the year spent almost one hundred thousand dollars less than Marlborough.

Spending on website design maintenance and development costs since July 2011.

1. Inappropriate Spending

This may be the CEO spending up large at Hooters, personal use of taxpayer or ratepayer money, and other spending which is simply not appropriate for a taxpayer funded organisation.

2. Excessive Spending

This is where the spending is on something appropriate such as a Council website, but the amount spent is excessive for the value gained. Just because something is worthwhile, doesn't mean that there should be no reasonable budget for it. For example, spending $300,000 on a website for a district of less than 50,000 residents.

3. Misdirected Spending

This is spending where the policy is misdirected and the spending is inefficient. An example from across the Tasman is Tony Abbott's paid parental leave scheme which rather than cap the subsidy at a level to target low and middle income parents, will provide the greatest subsidies (up to $2,900 a week) to the richest parents - who least need it.

A local example would be the Supergold transport subsidy which has been a financial windfall for transport operators, or interest free-student loans. If the desire is to help low income pensioners with transport costs or to make tertiary education more affordable, there are alternative policies which would achieve these outcomes more efficiently.

Your Money, Your Voice

Championing Value For Money From Every Tax Dollar

The Taxpayers' Union is 100 per cent politically independent. We are not affiliated with any political party and will never become a political party. We work with all parties, MPs or candidates that share our objectives. We work with any and all political parties and other organisations to expose government waste and low-quality government spending. Individual members have their own political involvements, but as an organisation the Taxpayers’ Union is vigorously independent in promoting the interests of New Zealand taxpayers.